Entering the third quarter, the traditional peak season for shipping has arrived, yet freight rates between China and the U.S. have seen a sharp decline.
The Shanghai Containerized Freight Index (SCFI), released by the Shanghai Shipping Exchange on July 4, shows that freight rates from China to the U.S. West Coast and East Coast were $2,089/FEU and $4,124/FEU, respectively. Compared to the peak rates on June 6—$5,606/FEU for the West Coast and $6,939/FEU for the East Coast—prices have dropped by 63% and 41%.
Previously, the U.S. implemented a so-called “reciprocal tariffs” policy, temporarily halting trade between China and the U.S. By May, the 90-day suspension of these tariffs led to a surge in shipping demand, with ports experiencing a “shortage of available container space.”
On July 7, the Shanghai International Shipping Research Center released its Q2 2025 China Shipping Prosperity Report. The report indicates that the prosperity index for container shipping companies in Q2 was 125.25 points, a significant increase of 14.93 points from the previous quarter, entering the “relatively prosperous” range. The confidence index for these companies also rose sharply by 26.25 points to 121.25 points, reaching the “relatively prosperous” range.
However, the report also predicts that China’s shipping prosperity index for Q3 will drop by 11.81 points to 108.99, entering the “slightly prosperous” range. Except for dry bulk carriers, whose confidence index is expected to rise, all other types of shipping companies will see varying degrees of decline in confidence, with container shipping companies experiencing the sharpest drop—10 points lower than this quarter.
From a “shortage of container space” to falling freight rates, it took just a month for the China-U.S. shipping market to experience an “unseasonably weak peak season.”
Southern Finance and Economics reporters learned from freight forwarding and logistics companies that as backlogged orders from Q2 were fulfilled, new orders are still being cautiously negotiated, leading to a decline in market demand. A Shenzhen-based freight forwarder explained that the drop in shipments is due to weakened restocking demand from overseas clients after clearing backlogs, coupled with uncertainty around new tariff policies, prompting many U.S. customers to delay orders and adopt a wait-and-see approach.
Export factories share this cautious outlook. Several Guangdong-based exporters told Southern Finance and Economics that while some U.S. clients are still placing orders, they are actively seeking alternative suppliers.
Deng Wenwu, Chairman of Guangdong Shengqiang Technology Co., Ltd., noted that after the release of the “China-U.S. Geneva Trade Talks Joint Statement,” he experienced a brief surge in orders, with dozens of U.S. clients inquiring about shipments. However, business volume has only recovered to about half of pre-tariff levels, as tariffs remain high. He also observed a recent decline in China-U.S. shipping rates.
Against this backdrop, export factories like Shengqiang Technology are diversifying their markets to mitigate risks.
Wu Weijian, General Manager of Guangdong Shitai Apparel Co., Ltd., stated that from a business perspective, they remain cautiously conservative about the U.S. market this year. “We’re adopting a ‘wait-and-see’ strategy, aiming for steady progress.”
Wu’s company is also actively exploring emerging markets beyond the U.S. “Previously, we focused on the U.S. market, with product designs and marketing materials primarily in English. Now, as we enter more niche markets, we’re investing more in localization—for example, adapting product aesthetics and language for Latin America, where Spanish and Portuguese dominate.”
Adjustments in shipping routes reflect shifting trade trends. In the first half of this year, Guangzhou Port—the largest comprehensive hub in South China—added seven new international container shipping routes, bringing its total to 179. Routes to emerging markets, including Africa, the Middle East, the Red Sea, and Southeast Asia, have seen increased frequency.
The expansion of emerging market routes has also boosted Guangzhou Port’s trade volume in the first half of the year.
Data shows that Guangzhou Port’s international cargo throughput grew by 23.8% year-on-year, while international container throughput rose by 20.6%. The Nansha Port Area, the port’s main hub, saw a 24.6% increase in international container throughput, ranking first in growth among China’s major coastal ports.
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